Dive Brief:
- Chopt Creative Salad has opened a pickup- and delivery-only location in New York City to meet the demand of digitally-generated orders at the company, which account for 40% of all orders, according to Forbes.
- Chopt customers order online at choptsalad.com or on the Chopt app. They can pick up their meals or have them delivered, without needing to order from an employee or waiting to pay a cashier.
- Chopt CEO Nick Marsh told Forbes the model provides better service, efficiency and speed than a traditional restaurant.
Dive Insight:
Larry Reinstein, who runs consulting firm LJR Hospitality, told Forbes that pickup and delivery formats will continue to grow in the industry because they're more cost effective and consumers are more mobile.
"For people under 30, this is the only thing they know," he said.
Indeed, Chopt is hardly alone in adding a pickup/delivery-only format. Starbucks just opened a pickup-only store in New York that lets customers order in advance on their phones and pick up their orders without the wait. Like Chopt, Starbucks generates about 40% of its U.S. sales through digital channels. McDonald's also recently introduced a new to-go-only format in London, with touchscreen ordering, reduced staff and smaller menus.
Arguably, a case study exists in Luckin about the resonance of such a concept. The fast-growing brand in China operates almost exclusively as a pickup or delivery concept.
There's certainly plenty of reason for brands to at the very least experiment with these types of models. According to the National Restaurant Association, off-premise sales now make up 60% of all foodservice occasions. This includes pickup, delivery and drive-thru and, as such, many brands are also experimenting with evolved drive-thru formats. Chipotle is adding more Chipotlanes, for example, in which customers can order ahead online, then pick it up in the Chipotlane, all without ever having to leave their car. Cava is working on a similar format, while KFC is piloting what it claims to be the world's first drive-thru-only restaurant in Newcastle, Australia.
As consumers continue to expect off-premise options, brands are wise to experiment with such formats to meet demand. However, as Sweetgreen has learned, there does seem to be a learning curve with such a big operational shift. Sweetgreen recently opened its 3.0 store in New York City, which also includes an order-ahead, pickup system, and, as Eater reports, the location is struggling with the basics of service.
Also, just because more off-premise-friendly formats are popping up isn't to say dine-in is going away. These new formats fit on-the-go, heavy-foot-traffic markets like New York City just fine, but that doesn't mean they'd translate in the suburbs where most people are commuting in cars and occupancy costs tend to run cheaper.
Further, chains are still very much investing in their dine-in business. Plenty of chains, from Taco Bell and KFC to Subway and Panera, are adding in-store ordering kiosks for dine-in consumers. For example, McDonald's is transitioning all of its domestic restaurants into the "Experience of the Future" design, which includes table service at many locations, and Chick-fil-A recently introduced a feature on its mobile app that enables dine-in customers to order more food from their tables.
